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FOX Business After the Bell

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TOPIC FREQUENCY

Ben Bernanke 12, Us 12, U.s. 10, Sandisk 9, Liz Claman 6, Lehman 5, Spain 4, United States 4, Kabul 4, S&p 4, Humana 3, Tunisia 3, Afghanistan 3, Europe 3, David Stockman 2, Ronald Reagan 2, Conner Powell 2, Ireland 2, Sony 2, The U.s. 2,
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  FOX Business    FOX Business After the Bell    News/Business. Stock  
   market updates. New.  

    September 14, 2012
    4:00 - 5:00pm EDT  

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in an apple economy. >> we talk about the iphone 5, and the orders of four things. dave: home builders doing well. bringing on wall street. the ben bernanke bounce continues. a lot of people thought there might be sell-offs and people taking a profit on what happened with the ben bernanke bounds. the bouncing ball continues. we will see what happens over the weekend but all the indices higher and didn't get the bump it did yesterday but the fact that there was confidence above 50 on the dow 50 points to not the same percentage, on the s&p and nasdaq. almost a full percentage point, doing extremely well and small and midsize cats as well. the largest gainer of all these
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indexes, small and mid-size cavs. when the bells ring that is what action begins. we have a full pack our. reagan budget director david stockman will tell us why he is on warpath against the fed and starting to question whether capitalism itself can survive post ben bernanke. four years since the collapse of lehman brothers. you have somebody who says he found the next lehman brothers and you worked here when it was spiraling down. larry mcdonald coming up. we will tell you what drove the markets with the data download. stocks surging with all three major indices ending in the green. the dow, the top performer at 1.5%. energy materials for the week winners and utilities flagged a bit. oil pushing above $100 a barrel to a four month high before calling ahead of the close. oil ended up 2.7% and $99 a
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barrel. latka back into the currency pits. the dollar fell to a four month low against the year of raising gains for the year. the euro jump as high as $1.34 rising above the $1.31 level for the first time since early may. we have all of today's action covered and whether it will continue into next week. larry levin has the latest. and the chief income strategist. all three join us now. let's start with larry. i was surprised. i don't know if you were. that there would be more profittaking after yesterday's run up but it did not happen at all today. >> when the market made new lows for the better part of the afternoon slowly selling off some buyers absorbing market, part of the afternoon here and once we made new lows we were
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four or five, buyers coming in to buy the market cheap. >> is this a signal that we will see the s&p before long? >> i would not be surprised before the end of september. no good surprise to anybody. we get that and buyers stepped in today. dave: how long does the sugar rush last. >> if you look how hedge funds and institutional investors are position they are more defensive and from surveys we have seen they have missed this rally so this on top of 250 fiscal and monetary stimulus to faction by various monetary policy central banks and governments around world including the latest from
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ben bernanke are compounding this so the stock market is discounting six months or so that perhaps the economies are going to show better strength. dave: you say the fed -- i am quoting from your notes -- the fed did, quote, more than required but less than the maximum. what would the maximum have been? this seems like the maximum to a lot of people. >> the maximum would have been terminating operations twist on the spot and launching a large-scale treasury purchase program in combination with a moderate scale mortgage-backed security program. the key is what is affecting the markets is it is open ended allowing those in the fixed-income market place to place bets on how long it will go on. dave: how long do you think? that opens ended question is haunting everybody including people who think it was a good move. we will talk to some this sale
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was a bad move but how long will they go the distance? >> we could see a year worth of mortgage-backed security purchases at this volume. the reason being there are factors affecting the u.s. economy, nothing culpable in the short timeframe. these issues built up over 20 years with access consumer borrowing out of the economy over the course of the next five years that they can't do anything short term to solve that. dave: were you surprised when you heard how bad ben bernanke said the economy was? let me quote from part of his press conference where he said what most people realize he put a fine point that fewer than half of the jobs lost during the recession have been restored. putting not 5 point on the job picture also talking with industrial production weighed down. the economy looks like it might have been drifting into a
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recession. >> volumes of stock pickers and through our process visit thousands of management teams a year and in our recent travels to portfolio companies and companies we are doing research on it is an issue of confidence. ceos of companies in american business are lacking confidence. that is largely due to fiscal policy emanating from bp. that is a structural problem and until it gets fixed you won't see corporate america become more friendly. the economy will muddle along. it is not terrible. it is not great. q e 3 is probably going to have limited impact and just going to cause further pain for the middle-class and lower echelon of the socioeconomic spectrum. dave: forgive me for interrupting but you say the economy is not terrible. judging on the language ben
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bernanke was using particularly during his press conference that began at 2:00 yesterday i would say it is pretty close to terrible from the way he was describing it. >> the basis of comparison is zero growth or recession than we are looking great. if your basis of comparison is normal economic outcome it is absolutely terrible. no other way to describe it. dave: are you changing your acquisitions based on what you heard yesterday and what the fed is likely to do over the next three month? >> absolutely not. we have a 25 year track record of value based investing. we love to zig when the market zags and we love to invest in small cap stocks with small balance sheet that pay dividendss. the consistency in the portfolio is companies with pricing power because the uncertainty that is out there whether we see inflation or not is an environment where the fed
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through its actions is debasing the dollar and we need pricing power and greater uncertainty. dave: we are looking at your qualifications. let me mention some particular picks you have brought to was. the encore wire which focuses on copper wire and commodities up as a result of this and a medical device company, why those stocks? >> the consistent theme for all three companies is pricing power. second-largest copper building wire manufacturer in the united states to compete against three companies. the private company and a buffet lead company which is in not martin group of, it is unfortunately an interaction in the marketplace but at the end of the day copper wire is used half and half between commercial construction and new housing construction and we have both of those sectors which are well below trim line and encore wire
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is trading at 15 times earnings and six times cash flow. 40% from the peak and significant earnings. dave: i got to interrupt because we are talking about ben bernanke and breaking news on ben bernanke. >> chairman of the federal reserve will meet with lawmakers in the finance committee. private meetings next wednesday. this according to an aide to one of those lawmakers and these will be private meetings when he meets with members of the finance committee and ben bernanke's meeting is going to focus on the economy and fiscal cliff. dave: thank you. i want to get a quick comment. that brings back memories of 2008. these emergency meetings between ben bernanke and members of congress. does that concern you at all? >> it is a good thing at this point and at least with regard to the fiscal cliff the fuse is not as short as the armageddon
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scenario. this is a positive development and signals that people in congress and senate in particular are willing to get serious about the issues facing the economy which does include policy uncertainty. dave: thank you very much. we are going to check back with you in a couple minutes to see how the s&p futures closed. the federal reserve turning the printing presses on maximum yesterday. david stockman called q e 3, quote, shea airmass. he says this will hasten a massive economic meltdown. tomorrow, marking a four year anniversary of the collapse of lehman brothers. someone has found the next lehman. we head back to liz claman for three days in the valley for an exclusive interview with electronic arts' chief operating officer, game publisher fighting
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back against the rise of online gaming. interesting questions, that and more coming up. [ male announcer ] what if you had thermal night-vision goggles, like in a special opsission? you'd spot movement, gather intelligence with minimal collateral damage. but rather than neutralizing enemies in their sleep, you'd be targeting stocks to trade. well, that's what trade architect's heat maps do. they make you a trading assassin. trade architect. td ameritrade's empowering web-based trading platform. trade commission-free for 60 days, and we'll throw in up to $600 when you open an account.
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dave: the s&p futures are closing. let's go to larry at the cme group. any sense what is going to happen on monday? >> the interesting thing if you look at statistics his 16 of 18 when we had a higher day. we think we opened the lower and stayed lower. that is what i am looking for on monday and it is staying lower and finding those bargain hunters will take tuesday and wednesday to extend the rally where we see it today. dave: thank you very much. office supply retailers had a strong day today. let's go to nicole petallides at the stock exchange for details. nicole: a day when we had records. multi-year highs. the office retailers were no different. a lot of a up arrows. looking at staples and officemax. staples is a name that came to
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the headlines in the last 24 hours as a private equity firms may be interested in buying staples legal taking it private. was reported yesterday but we have seen the name on the move to the upside. perhaps bain capital. all kinds of speculation you may not see until later in the year. office max another name on the move. to lehman brothers, it is all settled and they can focus the gain of $671 million as stock hits a 52 week high. dave: have a great weekend. the federal reserve announcing another round of money printing yesterday. ronald reagan's budget director calls the move, quote, madness and wonders if capitalism will survive ben bernanke's medicine. david stockman joins me now. great to see you again. madness, an end of capitalism? you are not a little overwrought?
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>> this is in q e 3. it is q e i the dismal to in finnerty. they are going to print money and they are going to buy bonds and when they run out of bonds they will buy the m b s and as with this program they are buying half of the monthly issue of mortgage-backed securities from all the wonderful agencies. fannie and freddie, half of them. there are some categories of bonds that don't exist because the fed or other central banks own them. what this is is the beginning or maybe the beginning of the end of the destruction of financial markets. interest rates don't mean anything. when the fed pulls the rate, six years and zero interest rate when it manages and manipulates the yield curve, what signal or pricing information does that give, administered and
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manipulated by the fed. dave: ben bernanke will meet with senate finance leaders monday from both parties. it does sound reminiscent of september of 2008 when the financial crisis was happening. are we that close to things exploding? >> it is more a case of the cats calling the kettle black. what is ben bernanke doing on the hill talking to them about fiscal problems? he is the primary creator of them. dave: everyone talking about the fiscal cliff -- [talking over each other] >> he has driven interest rates so low that for the first five years of the treasury yield curve we could borrow 70 basis points and three years at 35. to congress to capitol hill that is the equivalent of zero. it is free money. why should they bite the bullet and make tough choices? dave: like someone giving an alcoholic drink he is unable in congress. >> to pass out more drink. dave: he has two duties.
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one is to maintain value of the currency. the value of the dollar has fallen tremendously. hasn't shown itself as inflation. the evaluation is clear but he is supposed to keep unemployment down and how is this going to affect the real economy? >> it is clear the massive explosion of the balance sheet has been buying bonds hand over fist and creating money like there's no tomorrow since september of 2008 and the unemployment is very high if we measured it honestly more than 11% if you don't count millions out of work force. this isn't working. it is putting money into the financial system, fueling wall street speculation to get free money to buy anything with the yield and it is not helping -- [talking over each other] dave: i am going to try to reach for some sort of explanation from ben bernanke. when investing in the stock
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market you are investing in assets and companies that have real assets that make things as opposed to investing in gold or something. with his moves if you took money in the market you are investing in assets rather than the gold trade. >> you are buying assets with their fixed income or the russell 2,000 or whether it is some company that is probably vastly overvalued because when you put the ten year interest rate at 1.7% way below the rate of inflation that is not real. you are basically inflating all asset prices. real-estate companies. everything. dave: what happens when a currency loses its power. >> when a central bank fails what they are doing now is going all in. they don't even have a limit this.
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[talking over each other] connell: european central bank is doing the same thing. >> until unemployment gets to the level we think of the full employment, the injured economy, we will keep buying hand over fist if we run into bonds and mortgage-backed securities we will buy the russell 2,000 and modify those. the central bank that is out of control, we have a central bank that has declared itself the monastery of the u.s. economy. it is almost economic coup d'etat. dave: ronald reagan did believe in a strong dollar. [talking over each other] >> he didn't believe in the kind of craziness -- [talking over each other] dave: good to see you. have a good weekend. if you get any sleep based on this. four years since the collapse of lehman brothers. someone says there's another one
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working in the wings. former vice president of lehman larry mcdonald joining us. feeling pressure from the rapid growth of free online gaming. liz claman joins us with the company's chief operating officer coming up.
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dave: the rise of smart phones and tablets changing the video game landscape as players migrate toward online and social media games. how traditional gaming company is fighting back. the head to liz claman in her third day in the valley. liz: what could be bigger than
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madden football, those are all names and titles of electronic arts. and chief operating officer who started years ago, look at you, you have gaming in your blood and the question is the shift to mobile and online gaming. there are some crosscurrents going on and we see lower sales of games and consuls. what are you doing to fight that war turnaround tied? >> things move to mobile pretty quickly but consul's we are eagerly awaiting news about the next generation so the demise of consuls is damage we're shifting away from social network but the boom in mobile, it is huge. the announcement from apple this week is a big boost as well. what do you know? you follow the company for a number of years.
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making sure whenever possible we have experience. liz: when you say mobile and talk about tablets and android, what happens to the box out there when you walk into a game stop for retailers and purchase the box, does that go away? do you have meetings at high levels when you talk about that? >> eventually but it could be a decade from now. liz: not far away. >> we do $2.6 billion in physical media and we are able company. countries around the world still require physical media because of broadband connections that are slow. it is a little premature in people's minds. when we learn more from sony and microsoft we will understand. liz: sony play station was here earlier and tried to get them on the new consul. you know something is coming out
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and the fact is the ninth month in a row when the industry has contracted a bit or at least slow down. how is it converting? >> trading is $1.3 million individual. as physical media starts to slow down the growth in digital whether it is mobile or game advertising is starting to be bigger than the slowdown. from that perspective we are taking hits in physical media and matching them. liz: the detroit lions on the cover and how our sales trending today. >> the first twenty-four hours, 1.6 million copies and most importantly digital sales, very strong as well. physical media began at digital. [talking over each other] >> free to play issue is rearing
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its head for you guys. are you working on stuff like that? how do you monetize that? >> we are 150% on the previous quarter year on year. [talking over each other] >> play games on the browser and your iphone. we apply the company in the u.k. two years ago who are the number one publisher of this with the number one publisher on mobile and a good chunk of that is free to play games. liz: got to rest of the company itself which is down 30% year-to-date down 33% and there was a discussion. you probably wouldn't comment that the company might be bought by a private equity out fit. >> is there a question? liz: and? >> very focused on our strategy to continue to build our business on a global basis taking care of the digital business. we have the world's best brands
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and platforms we are building powered by the best in the industry. we feel good about ourselves. liz: chief operating officer of electronic arts. let us know how the holiday season goes. dave: we need some of that optimism. spread it to the east coast. rapid in silicon valley. tomorrow marks the four year anniversary of the fall of lehman brothers. we have a former vice president who is a warning two more lehmans on the horizon. we will tell you which ones coming up and a big change coming to the dow is a move could impact your money. stay tuned for that story in today's speed read. i'm freaking out man.
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new york stock exchange will bay $5 million for regular lear to charges over improper dreb shun of data. unitedhealth group is replaces kraft foods. it will take place start of trading september 24. the first change in the index since 2009. home depot is closing remaining 7 big box stores in china to focus on internaet based sales and specialty stores. china's economic slowdown is cutting demand. closures will result in loss of 850 jobs. eastman kodak warning a patent auction may fail due to difficulties reaching a deal with perspective buyers. in a court filing the company would exploit other alternatives for portfolio of 1100 patents. nike pricing latest breb bron shoe under the $300 mark. it will sell for 270 bucks when it hits stores. it will be among the most expensive sneakers ever.
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that is today's speed read. tomorrow marks four years since the lehman brothers collapse. our next guest was vice president of lehman he. he wrote a book about it. co -- colossal failure of common sense. do you think what bernanke did yesterday implies lack of common sense or common sense? >> it really does. it is a complete lack. if you think about it we have a new hedge fund. it is the federal rye serve. david: what do you mean. >> they have accumulated about when this is done, $2.5 trillion of bonds. one of the dangerous parts about that it is really run by academics. these people haven't taken risk. when i wrote my book and when you work on wall street you realize all those these are brilliant people they have never taken risk. sew they're managing all the risk. david: different kind of smarts. >> like baseball and soccer. and the taxpayers i think are at colossal risk. we'll look back at this day many years and say this is the day that really put us
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at risk. david: the risk is how you unwind this of 2 trillion dollar portfolio. >> this is like the roach motel. roaches check in but they don't check out. putting it on is easy. getting out is extremely difficult. david: when you get out is that when a lehman-like collapse would come about? >> i've been blocking about this on my website. lawrence g mcdonald.com. a lot of bond bears don't get something. the one thing the united states has with all the other markets we are the deepest and most liquid. this challenges that. the fed owns so many bonds if things turn around and normalize the 10-year treasury could grind up to 2% and go to 4 quickly because our market is less deep and less liquid. because the fed owns so many bond. david: one lehman on the horse son is when the fed
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tries to unravel $2.5 trillion in bonds. the another lehman is europe. >> think about ireland and spain. they are countries not that far away from each other and ireland two years ago, david, two years ago they did the stress test and banks came clean with the losses. spain still hasn't done this. i think in the next week or so you will see finally spain admit they have a major banking crisis that needs about total, total money about 300 billion including the banks and the states and the country. that is $300 billion bailout. david: i've been saying for a while, i don't think they have a banking crisis. what spain has, what greece has, what italy has, they don't make things anymore. when they became a part of europe became so cheap to buy everything because they had the euro as currency instead their own currencies they stopped making things and growing things and doing stuff they produce. obviously there is some production but a lot less. that's what has to change and they're not going to change by increasings taxes, which is what the imf has
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been recommending they do. >> that's true. look back at united states. we're trying to create jobs here. the federal reserve the whole point of qe3 is to create jobs but they're facing massive secular changes. david: in fairness to bernanke, he says you need fiscal policies in order to create growth in the united states as well. that doesn't include raising taxes. if anything you lower tax rates. >> i think like a tug-of-war. they're doing all the qe trying to create jobs. over here you have technology. you announced last couple days, best buy. best buy and amazon. amazon is crushing best buy. costing them jobs. technology is costing us jobs. ipad itself, think what the independednt pad is doing to the computer industry. we used to have a two computers. now we have computer andist pad. jobs are being wipe out by technology. look at secular changes in the mortgage markets. they're lowing rates. i talk about my book. david: that is third plug for the book, go ahead. >> the mortgage market is brown. securitization market they
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should be focused on fixing that. is the blood in the veins and capital. back in 2006, you had every strip mall in the united states you had a mortgage broker loaning money. those don't exist anymore. the securitization market is broken. the fed can lower rates all they want but they're not getting capital out there. david: we have to are up but how long will this rally continue? days weeks, months? >> this rally i think we're about a week away from a roleover because of europe. but i'm going to play it close to the vest there. david: larry mcdonald, great to see you. thank you for coming. if you for get even though he mentioned it three times, his bock is, a colossal failure of common sense. crowds are continue assaulting u.s. diplomatic compound in sudan, tunisia and yemen. we're live with the latest. also sandisk's stock has been on a tear. it is up more than 29% over the last three months. can momentum continue? liz claman joining with another interview with the
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sandisk ceo coming up. ♪
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>> i'm adam shapiro with your fox business brief. the bulls for a fourth straight day as investors continue to clear the federal reserve aggressive new stimulus plan. the dow finish 53 points higher, endings the day at 13,593. the latest effort from the central bank prompted a downgrade from the u.s. sovereign rating from eagan jones. the firm slashed the credit rating to double-negative saying the fed's qe3 will likely hurt the u.s. economy more than help it. with oil prices continuing upward trend surging to four-month high american drivers feel the pain at the pump. according to aaa's daily fuel gauge the national
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average for a gallon of gasoline, now $3.87. that's latest news from the fox business network, giving you the power to prosper. want to try to crack it? yeah, that's the way to do it! now we need a little bit more... a little bit more vanilla? this is great! [ male announcer ] at humana, we believe there's never been a better time to share your passions... because the results... are you having fun doing this? yeah. that's a very nice cake! [ male announcer ] well, you can't beat them. [ giggles ] ohh! you got something huh? whoa... [ male announcer ] humana understands the value of spending time together that's a lot of work getting that one in! let's go see the birdies. [ male announcer ] one on one, sharing what you know. let's do it grandpa. that's why humana agents will sit down with you, to listen and understand what's important to you. it's how we help you choose the right humana medicare plan for you. because when your medicare is taken care of, you can spend more time sharing your passions. wow. [ giggles ] [ male announcer ] with the people who matter most.
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i love you grandpa! i love you grandma! now you're a real fishman. [ male announcer ] humana. david: signs of a shortage in the industry bolstered the stock performance of many chip-makers recently with the notable exception of intel. sandisk is no exception. it has been among the beneficiaries rallying almost 30% in the last three months. so how can they insure the rally is not short-lived? let's head back to liz claman live in palo alto. liz? liz: try being in this business. one time oversupply. one time it is shortage. constantly state a of flux. sandisk has been in the business enough to know how to field all the moves. we have the ceo of sandisk. that is what i want to get to right away. in the past three months your stock skyrocketed.
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it rallied because there is perception there is shortage. what about stretching that out to really continue to have a nice run for the stock and for the company? what are you doing. >> first of all the demand for flash memory in smart devices such as smartphones, tablets, ultrathin devices is just continuing to explode, continuing to rice. at the same time the industry is experiencing a healthy demand supply balance and on top of that sandisk expanded its product portfolio. the combination of these three factors not only for the second half but as we look ahead at next year as well, we believe there will be strong demand supply balance and healthy environment. liz: you heard it here first. next year a supply and demand balance, at least a strong one. bring it home to the actually viewer watching right now. you're big in the memory stick and camera car business in retail stores. you've got some in your pockets. as you talk about that, you
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have to advance and move on and you're going now into the interprize business. tell us what that means? >> that's right. flash, enterprise applications is increasing. flash in data centers. flash in cloud application. >> servers. >> servers is being disruptive to hard dichks. what flash is doing because of that attribute beauty of running fast, giving you fast response time, many tried to access your data through the cloud. on your mobile devices. flash takes up less space. flash also takes up less power. so really provides a lot of values and that's why it is going into data centers. sandisk acquired a company called appliance technology, a startup, with enterprise hardware solutions. we supplemented the software capabilities as well. liz: i want to show the people. this is the enterprise business. i will take off the cover. what you have this piece of equipment that enables the cloud and all of workers and
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sandisk makes this. i am probably breaking a $50,000 piece of equipment, i don't know. but tell us what this will do? >> so this has a lot of flash memory chips in it. this can actually today go up to capacities of 800 gigabyte in it and fits in a small form factor. what this does is it goes into your data centers. it lets you access your data fast and, data centers are increasingly using it to give consumers and enterprise businessmen, you know, strong experience of fast access of data. >> i will ask prediction, does hard disk drive eventually go away? >> hard disk drive will always be there but flash memory will continue to get bigger and bigger and replace more and more of the hard disks in the future. liz: the head of sandisk. thanks very much for joining us. >> thank you. liz: we've covered him for a long time and a great
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uc berkeley cal bear. >> go bears. liz: we lost our first game. not to great. as we say good-bye from the flipboard headquarters around on behalf of intel and headquarters, hosts for "3 days in the valley". what a crew we had here. alex, pete and lance and the whole team, we're bidding you good-bye from silicon valley. david: seat you later, liz. that is a great crew. protests are expanding in the middle east and across north africa with at least three u.s. compound suffering assaults. we're live on the ground live in the middle east coming right up. [ female announcer ] you want family dinner to be special.
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david: violent uprisings are spreading all over the middle east and north africa. rioters taking down the american flag at the u.s. embassy in tunisia and deaths have been reported in violent demonstrations in
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lebanon where the pope is now visiting. fox news's conner powell in kabul, afghanistan with the very latest. con err? >> dave, more than a dozen countries around the world have seen violent anti-american protest since the anti-islamic video posted on the internet in recent days. the violence seems to be getting more intense around the world. today in tunisia, the u.s. embassy in tunis was attacked. protesters breached the walls. they got into the compound setting fire to cars and vehicles. and also breaking windows. they raised a black flag that represents sort of a very conservative islamic sect in the u.s. embassy there. they also attacked another american school that was nearby the u.s. embassy there. in lebanon several hundred protesters attacked a restaurant that had both a hardee's and kfc, kentucky fried chicken snaunlt there.
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at least three people killed and many more injured. in yemen, u.s. marines are on their way to yemen to the u.s. embassy there to try to secure that facility. yemen has been an area where al qaeda has been operating there for many, many years right now. extremely dangerous country and seen very intense and violent protests last 72 hours. here in afghanistan a much different story. there were no real large protests in kabul. one medium-sized protest in jalalabad. it was very peaceful at lot of anti-american slogans but for the most part it lasted about an hour and then the protesters went home. everybody expects there could be more protests in kabul and across the larger middle east and muslim word, dave. david: conner powell from kabul, afghanistan. thanks very much. college students spent $1200 on textbooks. one company has come up with a way to curb the
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skyrocketing prices. we'll tell you what that is coming up.
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david: the average college student spent $1200 on textbooks alone last year. one silicon valley startup came up with a solution to rent textbooks online. liz claman caught up with them and how they're expanding. >> so you're right, we're clearly the leading textbook rental company. we have more ebooks than
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anybody. we're seeing higher percentage of people get ebooks as well. we're really focusing on developing a largest connected network of students, students, educators, educational material. things they need when they're a junior senior in high school and graduate school and law school and medical school. our mission remained the same since the first time you guys had us on save students time, money and help them get starter. since we started the company we saved students close to billion dollars on cost of tex boox. >> you're making money all the time. so you have to monetize. >> god bless america. liz: and silicon valley too. tell us the trend are people renting physical textbooks or downloading ebooks. >> it is interesting. in retailer, dichotomy of super luxury and low cost. you're seeing that in education. a group of people want the new textbook. they want it new. they don't want anybody else's underlines.
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the used market is collapsing because we price substantially less than the used market. rentals are growing substantially. and so print will be around for a long time. having said that we're seeing the first interesting move in e textbooks. used to be one, two, 3%, and now we've seen days as high as 11%. liz: you have 200 million in funding. that is a pretty good amount when it comes to funding. massive venture capital. not necessarily little salting from angel investors. the ipo the investors want their money back eventually. is that on the horizon? >> like everybodies he will in our case we're >> fortunately we're so well funded and we have great investors like insight and kleiner perkins who are such great firms they see the goodness creating the

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